Mergers & Acquisitions

Aloha Saying Goodbye to Hawaii

Susser Petroleum acquires 100-store island chain

HOUSTON & DALLAS -- On a day of deals, Susser Petroleum Partners LP has signed an agreement to acquire Honolulu-based Aloha Petroleum Ltd. Aloha--Hawaii's largest independent gasoline marketer and one of the largest convenience store operators on the islands--said recently that it was reviewing its strategic alternatives, which could include selling the company, because growth opportunities in the state are "limited."

Aloha Petroleum Susser (CSP Daily News / Convenience Stores / Gas Stations)

The base purchase price for Aloha is approximately $240 million, subject to a post-closing earnout, certain closing adjustments and before-transaction costs and expenses.

As reported in a 21st Century Smoke/CSP Daily News Flash, Aloha currently markets through approximately 100 Shell-, Aloha-, and Mahalo-branded gas stations throughout the state, about half of which are company operated.

"Hawaii is a great new market for us with an economy that has grown faster than the overall U.S. economy in the last few years," said Bob Owens, CEO of Susser Petroleum Partners LP. "Aloha Petroleum has an impressive legacy of growth, profitability and operational excellence. The overall transaction is compelling in that the price represents an approximate 7x run-rate EBITDA multiple. Additionally, most of the cash flow is expected to constitute qualifying income."

He continued, "Aloha Petroleum will allow us to expand our current geographic footprint and extend our overall business capabilities into refined products terminals. We see the integration of terminals, retail and wholesale operations within Aloha as a strong platform in Hawaii as well as a model for the expansion of our overall core business."

Vicki Granado, a spokesperson for Susser Petroleum's parent company Energy Transfer Partners LP, told CSP Daily News, "One of things [ETP] stated as a strategy was to grow this part of the business. So when they looked [at Aloha, they saw an] attractive combination of the retail piece, extensive fuel distribution, the storage … so it was the combination of what [Aloha] had to offer and its fit into the portfolio."

The company expects the transaction to close in fourth-quarter 2014, subject to customary closing conditions, required consents and other regulatory approvals.

Houston-based Susser Petroleum's Aloha announcement came on the same day that ETP dropped down MACS to Susser Petroleum and said that it will change Susser Petroleum's name to Sunoco LP. (See separate report on and in CSP Daily News.)

Houston-based Susser Petroleum distributes approximately 1.7 billion gallons of motor fuel annually to Stripes and Sac-N-Pac convenience stores, independently operated consignment locations, convenience stores and retail fuel outlets operated by independent operators and other commercial customers in Texas, New Mexico, Oklahoma, Kansas and Louisiana.

ETP is a master limited partnership (MLP) owning and operating one of the largest and most diversified portfolios of energy assets in the United States. It owns 100% of Sunoco Inc., with a network of more than 5,000 Sunoco-branded retail sites in 24 states, and 100% of Susser Holdings Corp., Corpus Christi, Texas, which operates more than 640 convenience stores, primarily in Texas.

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